Securities code: 600396 securities abbreviation: Shenyang Jinshan Energy Co.Ltd(600396) Announcement No.: Lin 2022-003 Shenyang Jinshan Energy Co.Ltd(600396)
Announcement on the reply to the inquiry letter of Shanghai Stock Exchange
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Shenyang Jinshan Energy Co.Ltd(600396) (hereinafter referred to as the company or Shenyang Jinshan Energy Co.Ltd(600396) ) received the inquiry letter on Shenyang Jinshan Energy Co.Ltd(600396) performance forecast from Shanghai Stock Exchange on January 6, 2022 (SSE Gong Han [2022] No. 0008, hereinafter referred to as the inquiry letter). The company carefully checked and implemented the questions raised in the inquiry letter one by one, and now replies to the matters involved in the inquiry letter as follows:
1、 The announcement disclosed that the company expects to realize a net profit attributable to the parent company of -1.8 billion yuan to -2.038 billion yuan in 2021. It is estimated that the single quarter loss in the fourth quarter is 887 million yuan to 1.125 billion yuan, which is mainly due to the significant rise of coal price year-on-year and the upside down of the company’s power generation and heating costs. Please disclose: (1) the revenue and cost composition of the company’s power generation and heating business, In combination with the trend of coal price and the price change of thermal power products, explain the reasons for the large loss in the whole year and whether there is sufficient risk prompt in the early stage; (2) In combination with the coal price trend and year-on-year change in the fourth quarter, the company’s raw material procurement policy, the signing and implementation of the annual long-term Coal Association contract, and the purchase and sales matching between the operating revenue side and the cost side, further explain the reasons and rationality for the further expansion of the loss scale in the fourth quarter, and self-examine whether there is any situation in which improper profit adjustment is used to damage the interests of investors.
The reply is as follows:
1.1 revenue and cost composition of power generation and heating business of the company.
In 2021, the company realized an operating revenue of RMB 6.471 billion, including power revenue of RMB 5.384 billion, accounting for 83.2% of the operating revenue, a decrease of RMB 770 million over the same period in the reporting period; The thermal revenue is 1.034 billion yuan, accounting for 16% of the operating revenue, a decrease of 01 million yuan over the same period in the reporting period. In 2021, the company realized an operating cost of RMB 7.925 billion, including fuel cost of RMB 5.55 billion, accounting for 70.03% of the operating cost, an increase of RMB 1.134 billion over the same period in the reporting period; Other costs and expenses such as depreciation, employee compensation and repair are RMB 2.375 billion, accounting for 29.97% of the operating cost, an increase of RMB 191 million over the same period in the reporting period. The main reasons are as follows: (1) affected by the sharp rise of coal price, except Baiyinhua Jinshan Power Generation Co., Ltd., the marginal contribution of power generation and heating of other coal-fired power enterprises is negative. In order to reduce the loss range, the company actively optimized the startup mode, with a year-on-year decrease in power generation of 3.64 billion kwh, a year-on-year decrease in heat sales of 336000 GJ, and a decrease in power generation revenue of 1.1 billion yuan Heating revenue decreased by 01 million yuan.
(2) Since the beginning of the year, affected by policies, epidemic situation, contradiction between supply and demand and other factors, the coal price has increased significantly year-on-year. The unit price of standard coal (including tax) in the whole year was 1047.38 yuan / ton, an increase of 369.83 yuan / ton year-on-year, an increase of 54.6%, and the fuel cost increased by 1.732 billion yuan.
1.2 explain the reasons for large losses in the whole year in combination with the trend of coal price and the price change of thermal power products.
In 2021, the company’s net profit attributable to the parent company after deducting non recurring profits and losses is expected to increase by 2.058 billion yuan year-on-year, mainly due to the sharp rise in coal prices. As mentioned above, while the coal price rose sharply year-on-year, the electricity price increased by only 11.17 yuan / MWh and the heat price increased by only 0.63 yuan / GJ over the same period, with an increase of 3.5% and 1.4% respectively. The annual increase of electric heating price is far less than that of coal-fired price, resulting in negative marginal contribution of power generation and heating of other coal-fired power enterprises except Baiyinhua Jinshan Power Generation Co., Ltd. Second, fulfill the responsibility of central enterprises to ensure supply and ensure national energy security. In the case of serious “upside down” of power generation and heating costs, the company resolutely shouldered the political and social responsibilities of ensuring power supply, heating and people’s livelihood, ensured that the units should make full use of their power, and went all out to do a good job in the “Three Guarantees”.
1.3 whether the company has conducted sufficient risk warning in the early stage.
From August 2021 to December 2021, the company gave tips on the risks of the company’s performance on the websites of China Securities Journal, Shanghai Securities Journal, securities times and Shanghai Stock Exchange, as follows:
First, the 2021 interim report disclosed on August 29, 2021. In “major changes in the company’s operation during the reporting period, as well as events that have a significant impact on the company’s operation during the reporting period and are expected to have a significant impact in the future”, the company disclosed that “according to the existing market conditions, the coal price continues to operate at a high level, and it is predicted that the cumulative net profit of the company at the end of the next reporting period will be significantly reduced compared with the same period of the previous year.”
The second is the announcement on daily connected transactions issued on September 30, 2021 and October 29, 2021. The company conducts related party transactions such as coal procurement in order to ensure supply demand, and the announcement indicates the impact of related party transactions on the company’s performance in 2021, That is, “the daily related party transactions of purchasing coal are mainly to ensure the people’s livelihood to use coal during the heating period this winter and meet the requirements of the grid support load. Under the condition that the current electricity and heat prices remain unchanged, due to the continuous sharp rise of coal prices, the power generation cost has been inverted, and the power generation and heating will lead to a further decline in profits in 2021.”
The third is the announcement of abnormal fluctuation and risk warning of stock trading on December 16, 2021, December 21, 2021 and December 22, 2021. According to the requirements of Shanghai Stock Exchange, the company has repeatedly prompted the sharp decline of the company’s performance from January to September and from July to September in the above announcement.
2. In combination with the coal price trend and year-on-year change in the fourth quarter, the company’s raw material procurement policy, the signing and implementation of the annual long-term Coal Association contract, the purchase and sales matching between the operating revenue side and the cost side, further explain the reasons and rationality for the further expansion of the loss scale in the fourth quarter, and self-examine whether there is any situation in which improper profit adjustment is used to damage the interests of investors.
The company adheres to the procurement strategy of relying mainly on the coal from the state mine director’s Association, supplemented by the coal directly supplied by factories and mines to the market and supplemented by the imported coal with a rigid gap. In 2021, the coal volume of the long-term Association contract signed was 7.6 million tons, accounting for 57.9% of the total coal volume of the whole year, and the fulfillment rate of the long-term association coal contract was 85%. In the fourth quarter, the contradiction between supply and demand in the coal market further intensified due to the pull of energy supply and demand during the heating period. The coal volume of the long-term agreement contract was 1.8 million tons, and the fulfillment rate of the long-term agreement coal contract in this quarter was 90%.
In the fourth quarter, the company’s coal price showed a significant growth trend. The unit price of standard coal (including tax) in the factory was 1518.94 yuan / ton, an increase of 846.48 yuan / ton over the same period, an increase of 125.9%, affecting a profit reduction of 1.238 billion yuan, an increase of 671.50 yuan / ton over the previous three quarters, an increase of 79.2%, and a profit reduction of 983 million yuan.
Among them, the unit price of standard coal (including tax) in October was 1372.24 yuan / ton, an increase of 221.56 yuan / ton month on month, an increase of 19.3%; In November, 1565.93 yuan / ton, a month on month increase of 193.69 yuan / ton, an increase of 14.1%; In December, 1604.42 yuan / ton, a month on month increase of 38.49 yuan / ton, an increase of 2.5%.
In the fourth quarter, the company increased the electricity price by 20% to 1.479 billion kwh, accounting for 37.28% of the electricity in the fourth quarter, with a year-on-year increase of profit of 86 million yuan. The income generated by the increase of electricity price is far lower than the impact of the rise of coal in this quarter, which failed to effectively alleviate the upside down of the company’s power generation and heating costs. At the same time, the company earnestly fulfilled the political and social responsibilities of central enterprises. The generator units should be fully operated and fully developed, consuming 1646300 tons of standard coal, spared no effort to ensure the safety and stability of power generation and heating, and resolutely shouldered the responsibility and responsibility of energy supply, resulting in the further expansion of the loss scale in the fourth quarter.
Through self-examination, the company does not use improper profit adjustment to damage the interests of investors.
2、 According to the previous periodic report, the net assets of the company at the end of 2020 were 2.116 billion yuan, which was close to the expected loss scale of this performance forecast. The company’s main business is thermal power generation, with thermal power installed capacity accounting for 91.57%. The company is requested to make supplementary disclosure: (1) whether the performance loss may cause the company to touch the delisting risk warning situation with the audited ending net assets of the latest fiscal year and negative, and give necessary risk tips; (2) In combination with the composition of the main business, the current production and operation status and the expected large losses in the current period, supplement whether there is a significant deterioration in the company’s operating fundamentals and whether there is a major uncertainty in the company’s sustainable operation ability.
The reply is as follows:
1. Whether the performance loss may cause the company to touch the delisting risk warning situation with negative net assets at the end of the audited period of the latest fiscal year, and give necessary risk tips.
According to the calculation of the company’s financial assets department, the company’s net assets attributable to the parent company at the end of 2021 are positive, and the operating income is more than 100 million yuan, which does not touch the financial delisting risk warning index in the stock listing rules of Shanghai Stock Exchange. Investors are requested to take the company’s 2021 annual report as the standard and pay attention to investment risks.
2. In combination with the composition of main business, current production and operation status and expected large losses in the current period, supplement whether there is a significant deterioration in the company’s operating fundamentals and whether there is a major uncertainty in the company’s sustainable operation ability.
In 2022, with the continuous deepening of power market-oriented reform, the gradual establishment and improvement of electricity price mechanism and the gradual implementation of the coal price limit order of the national development and Reform Commission, it will play a positive role in alleviating the operating difficulties of coal power enterprises, but the cost inversion will still exist in a certain period of time. The company will further improve quality and efficiency, reduce losses and control losses. The operating fundamentals are expected to improve, and there is little possibility of significant deterioration.
In order to ensure the safety of funds, the company actively contacts with various financial institutions. At present, it has been confirmed that the current loans due in 2022 can be normally continued, and the bank credit is increased by 2 billion yuan. The credit reserve can fully cover the long-term loans and operating capital gap due to be repaid in 2022, and there is no major uncertainty about the company’s sustainable operation ability.
3、 The company’s share price has risen significantly since December 2021. On December 17, the shareholder Liaoning Energy Industry Co.Ltd(600758) investment (Group) Co., Ltd., which holds more than 5% shares, disclosed the centralized bidding reduction plan. In combination with the communication records of investors, the company is requested to verify whether relevant shareholders know relevant performance matters in advance, and submit the list of insiders of insider information on this performance notice for transaction verification.
The reply is as follows:
1. Investor communication records.
During the significant rise of the company’s share price in December 2021, the company did not receive calls from investors, received research from institutional investors, and communicated with investors about the company’s performance in 2021.
2. Verify whether relevant shareholders know relevant performance matters in advance. The company verified with the second largest shareholder Liaoning Energy Industry Co.Ltd(600758) investment (Group) Co., Ltd. whether the shareholders knew the relevant performance matters in advance, Liaoning Energy Industry Co.Ltd(600758) investment (Group) Co., Ltd. replied that “our company disclosed the centralized bidding reduction plan on December 17, 2021, and there was no situation of knowing the performance matters of your company in 2021 in advance”. The company also did not take the initiative to communicate with Liaoning Energy Industry Co.Ltd(600758) investment (Group) Co., Ltd. on the performance of 2021.
3. The performance forecast shall submit the list of insider information for transaction verification.
The company strictly controls the scope of insiders in this performance forecast in accordance with laws and regulations and the measures for the administration of Shenyang Jinshan Energy Co.Ltd(600396) insiders, and the specific list has been submitted to Shanghai stock exchange for filing.
The data of 2021 referred to in the above reply has not been audited and confirmed by accountants.
It is hereby announced.
Shenyang Jinshan Energy Co.Ltd(600396) board of directors
January 14, 2002
